The share price of Northgate (LSE: NTG) theCounty Durham-basedlight-commercial vehicle hirecompany that operates in the UK and Spain is up 4.1% in trading so far today, following publication of the companys interim results for the half year to31 October 2014.
Northgate has reported a 70% increase in pre-tax profit, up to 46.7m, with a 49% increase in underlying pre-tax profit, up to 47.8m. Basicearnings per share (EP) grew 78%, to 27.9p, with a56% increase in underlying basicEPS.
The companys net debt has increased by 15%, rising to397m, which it says was expected, in order to support growth in both countries in which it operates. Gearing also increased, from 91% in April 2014 to 100% at the end of the first half of this year. But return on capital employed has also risen, from 91% back in April to 11.4% at the end of the half.
Northgate says that theres been vehicles-on-hire growth of 1,800 in the UK and1,300 inSpain during the first half. Both represent a decline in vehicles-on-hire growthcompared withthe corresponding period in 2013, when the figures were 2,800 in the UK and 1,300 in Spain. Average utilization, compared withthe same period in 2013, is marginally up in the UK 89% versus 88% but marginally down in Spain 92% versus 93%.
Northgates board is recommending a 34% increase in interim dividend, which will bring it to 4.3p per share.
Commenting on the results, chairman Bob Mackenzie said:
We are pleased by the growth delivered by the Group in the first six months of the year. This reflects the work done in recent years, in particular, supporting the continued investment being made in our people, systems and infrastructure. Our plans to open new sites in the UK are on track and trading from these new sites is exceeding our initial plans.
The Board remains confident that we are well positioned to deliver further growth and attractive returns to shareholders. The Group is currently trading slightly ahead of our expectations.
With this mornings rise, Northgates share price is now up 18.7% on this time last year, trouncing the FTSE All-Shares 2.2% gain. And the story is similar over the past five years, too, with Northgates share price rising 127% compared with a 34% increase in the FTSE All-Share index.
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Jon Wallis has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don’t all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.